India’s gold imports plummet 99.5% to three-decade low

MUMBAI: India’s gold imports plunged 99.9% year-on-year in April to their lowest in nearly three decades as air travel remains suspended and jewellry shops were closed amid a nationwide lockdown to curb the spread of coronavirus.

The world’s second-biggest consumer of the gold after China, imported its lowest monthly volumes at around 50 kilograms of gold in April, down from 110.18 tonnes a year ago.

In value terms, April imports dropped to $2.84 million from $3.97 billion a year ago. The information was revealed to media outlets by a person with knowledge of provisional finance ministry data, who asked not to be identified as the information is not public and he was not authorised to speak.

Overseas purchases slumped 99.5 percent to 60 kilograms in April from 13 tons a month ago. This would be the lowest monthly inflow in records going back to 2010, according to data available with Metal Focus, one of the world’s leading precious metals consultancies.

A nationwide lockdown, which has been in place since March 25, has rippled through the country’s economy hitting incomes, jobs and shuttering many industries including airlines, and gems and jewelry.

Imports were negligible in April as most of the country’s imports are typically shipped by air, with a smaller volume coming via land from either Bangladesh or Nepal. All India Gem and Jewellery Domestic Council chairman estimated imports will halve this year to about 350 tons.

India has eased some lockdown restrictions but is unlikely to help salvage economic growth this quarter or even the fiscal year as consumption continues to suffer. Gross domestic product is expected to contract by 24.8 percent year-on-year in the quarter started April. Most jewelry stores across the country continue to be closed in one of the longest shutdowns ever.

Meanwhile, gold price in the domestic market rose for the second day in a row on Monday amid rising tensions between US and China and as lockdown restrictions were eased in large parts of India.

June gold futures prices rose 0.7 percent to Rs 45,830 per 10 gram on the Multi Commodity Exchange (MCX), against a gain of Rs650 per 10 gram in the previous session. July silver futures edged 0.44 percent higher at Rs 41,780 per kg.

Gold had risen 18 percent last year as the China-US trade dispute increased demand for the safe-haven amid interest rates cuts by the US central bank. The US dollar moved away from an over one-month low on Monday, making gold costlier for investors holding other currencies.